of ENGINEERING-HUNEDOARA, ROMANIA 39 1. BUSINESS ANALYSIS OF OPEN INVESTMENT FUNDS IN SERBIA
Lidija Barjaktarovic, Dejan, Maja
unpublished
The performance of open investment funds in Serbia in the period of 2007 to 2012 is the subject of this paper. It was found that the performances of Serbian investment funds are unsatisfactory by applying Sortino, Sharper and Treynor ratios. The topic of this paper is to analyze the performance achieved by the establishment of open investment funds in Serbia (in 2007) until 2013. Review of investment funds operations is based on the returns they bring and the risks they accept in the business.
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... n Serbia, the equity funds, as the most risky funds, started to operate in 2007, while cash funds (as the least risky funds) were introduced in later phase after 3 years. At the moment there are 16 open investment funds (at the end of 2012), where value growth and value maintenance funds dominate. A total net asset of open investment funds is 2,324 million Dinars i.e. 20 million Euros (at the end of 2012). INTRODUCTION Open investment funds in Serbia started operations in 2007, in accordance with implemented regulation in the country. In accordance with it, types of open investment funds on Serbian market were: value maintenance funds, balanced funds, asset value growth funds and return funds. Market conditions influenced existence of value maintenance funds, balanced funds and asset value growth funds. The regulator emphasized importance of equity, portfolio management, limitations in investing and protecting assets of open investment funds. At the same time Law on equity markets defined necessary infrastructure for stable financial market, such as equity, qualified staff, equipment, financial instruments, terms and conditions for trade, risk management, etc. [22, 23, 26] After 2007 there is a growth in the number of available open funds, and in the first two months of 2013 there were 16 open investment funds registered which are still managed by four of the management corporations (total assets under management are 24.1 million Euros on 02/28/2013; NBS, 2013). Meanwhile, six open investment funds were closed or merged with another fund. If we analyze market situation, we can conclude that the strongest and safest position on Serbian market have open investment funds established by commercial banks (such as Raiffeisen, Erste and Komercijalna bank). They hold 85.72% of market share in terms of assets under management on 02/28/13 [1,2]. Raiffeisen's open investment funds (World, Cash and EuroCash) hold 67.73%, Erste's open investment funds (Cash, EuroCash and EuroBalanced) hold 16.38% and Kombank Invest 2.21% [1,2]. It can be explained with strong support of mother bank, which provides good customer base and joint offer to the customer for a-vista or term deposit and cash fund offer. Currently, potential customer (investor) can get higher revenue with open investment fund than with commercial bank. However, there is clear message that they do not guarantee that the customer (investor) will not lose or win the invested sum of money [25]. The second strongest group of open investment funds in terms of continuity represents funds established by Slovenian (Ilirika's funds) and Croatian (Fima) owners (individuals) of investment funds in those countries [1,2]. It is important to mention that Slovenian funds expanding their activity on Serbian market on the basis of buying existing open funds, such as Delta, Citadel, Fima Novac, etc. Currently, Ilirika holds 8.38% and Fima 5.29% of Serbian market share in terms of assets under management. It is important to say that in Serbia, the equity funds, as the most risky funds, started to operate in 2007, while cash funds (as the least risky funds) were introduced in later phase after 3 years. It is not in accordance with the world's trend. The effects of world economic crisis were visible during the second quartile of 2008. It also had bad impact on development of open investment funds
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